BILL NUMBER: AB 661 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 18, 2013
INTRODUCED BY Assembly Member Beth Gaines
( Coauthors: Assembly Members
Conway, Harkey, Logue, Olsen,
Patterson, and Wagner )
( Coauthors: Senators
Gaines, Knight, Nielsen, and Walters
)
FEBRUARY 21, 2013
An act to amend Section Sections
13405 and 13406 of the Government Code, relating to state
government.
LEGISLATIVE COUNSEL'S DIGEST
AB 661, as amended, Beth Gaines. State government: FISMA.
Existing law, the Financial Integrity and State Manager's
Accountability Act of 1983 (FISMA), provides that state agency heads
are responsible for the establishment and maintenance of a system or
systems of internal accounting and administrative control within
their agencies, as specified. Existing law requires that state agency
heads covered by the FISMA shall, biennially,
conduct an internal review and prepare a report on the adequacy of
the agency's systems of internal accounting, administrative control,
and monitoring practices. Copies of the reports are required to be
submitted to the Legislature, the California State Auditor, the
Controller, the Treasurer, the Attorney General, the Governor, the
director, and to the State Library where the copies are required to
be available for public inspection.
This bill would also require the report to be posted on the agency'
s web site Internet Web site within 5
days of finalization and would require the report to be signed
by the head of the agency under penalty of perjury. By requiring the
head of an agency to sign the report under penalty of perjury, this
bill would expand circumstances under which a person may be convicted
of a crime and, thereby, would impose a state-mandated local program
.
This bill would provide that the head of an agency that fails to
submit the report within 30 days of its deadline shall be suspended
without pay until the agency comes into compliance with the reporting
requirements. This bill would require the framework for conducting
an internal review of an agency's systems of internal accounting and
administrative control to include auditing of the agency's assets,
liabilities, revenues, and expenditures, as well as reconciliation of
accounting and budget documents reported to the Department of
Finance and the Office of the Controller.
Existing law requires the head of an internal audit staff of a
state agency to investigate any allegation that an employee of the
agency provided false or misleading information in connection with
the review of the agency's systems of internal accounting and
administrative control or in connection with the preparation of the
biennial report on the systems of internal accounting, administrative
control, and monitoring practices. Existing law requires the head of
an internal audit staff or designated internal control person to
report in writing to the head of the agency or the division if there
is reasonable cause to believe that false or misleading information
was provided.
This bill would require the report to also be submitted to the
Department of Finance and the Joint Legislative Audit Committee.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 13405 of the Government Code is amended to
read:
13405. (a) To ensure that the requirements of this chapter are
fully complied with, the head of each state agency that the director
determines is covered by this section shall, on a biennial basis but
no later than December 31 of each odd-numbered year, conduct an
internal review and prepare a report on the adequacy of the agency's
systems of internal accounting, administrative control, and
monitoring practices in accordance with the guide prepared by the
director pursuant to subdivision (d).
(b) The report, including the state agency's response to review
recommendations, shall be signed , under penalty of perjury,
by the head of the agency and addressed to the agency
secretary, or the director for agencies without a secretary. Copies
of the reports shall be posted on the agency's web site
Internet Web site within five days of
finalization, and submitted to the Legislature, the California State
Auditor, the Controller, the Treasurer, the Attorney General, the
Governor, the director, and to the State Library where they shall be
available for public inspection. If an agency fails to submit
the report within 30 days of the report deadline, the head of the
agency shall be suspended without pay until the agency comes into
compliance with the reporting requirements.
(c) The report shall identify any material inadequacy or material
weakness in an agency's systems of internal accounting and
administrative control that prevents the head of the agency from
stating that the agency's systems comply with this chapter. No later
than 30 days after the report is submitted, the agency shall provide
to the director a plan and schedule for correcting the identified
inadequacies and weaknesses, which shall be updated every six months
until all corrections are completed.
(d) The director, in consultation with the State Auditor and the
Controller, shall establish, and may modify from time to time as
necessary, a system of reporting and a general framework to guide
state agencies in conducting internal reviews of their systems of
internal accounting and administrative control. This framework
shall include auditing of the agency's assets, liabilities, revenues,
and expenditures, as well as reconciliation of accounting and budget
documents reported to the Department of Finance and the Office of
the Controller.
(e) The director, in consultation with the State Auditor and the
Controller, shall establish, and may modify from time to time as
necessary, a general framework of recommended practices to guide
state agencies in conducting active, ongoing monitoring of processes
for internal accounting and administrative control.
SEC. 2. Section 13406 of the Government
Code is amended to read:
13406. (a) The head of the internal audit staff of a state agency
or , a division, as specified by the
director, or, in the event there is no internal audit function, a
professional accountant, if available on the staff, designated as the
internal control person by the head of the state agency or a
division, shall receive and investigate any allegation that an
employee of the agency provided false or misleading information in
connection with the review of the agency's systems of internal
accounting and administrative control or in connection with the
preparation of the biennial report on the systems of internal
accounting, administrative control, and monitoring practices.
(b) If, in connection with any investigation under subdivision
(a), the head of the internal audit staff or the designated internal
control person determines that there is reasonable cause to believe
that false or misleading information was provided, he or she shall
report in writing that determination to the head of the agency or the
division , the Department of Finance, and the Joint Legislative
Audit Committee .
(c) The head of the agency or division shall review any matter
referred to him or her under subdivision (b), shall take such
disciplinary or corrective action as he or she deems necessary, and
shall forward a copy of the report, indicating therein the action
taken, to the director within 90 days of the date of the report.
SEC. 3. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.